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Foreclosures Reduce Taxable Property Values

Posted By admin || 31-Jul-2009

According to an article in the Star-Telegram, the rise in foreclosures has slowed Tarrant County's net taxable property values putting many cities on a tight budget.
The article said:
"Tarrant County's net taxable property values increased the smallest amount in 15 years, creating fear among many local government officials as they prepare their budgets for next year. The data released Monday shows a 2 percent increase in the net taxable value, compared with year-after-year increases ranging from 6 to 11 percent since 1994. Unless local governments boost their tax rates, it could mean less money to spend."
"We were expecting about $16 million in net new monies next year," Rogers said. "Now it will be close to $6 million. It is a pretty substantial hit for us. It will change the assumptions in this budget, and it is going to be a real busy week for us to figure out how we will deal with lower revenues."
In many cities such as Dallas Fort-Worth, municipal spending has grown faster than the tax base. As job losses increase and many properties succumb to foreclosure the amount of money available for taxation has become smaller. But it's the rise in foreclosures that has played the most significant role in creating an environment where many cities are simply unable to collect most of the tax revenues they were expecting.
And because of this, many city governments are faced with tough budget choices and may be forced to reduce spending for essential services such as police and fire protection if they are unable to increase the city coffers.